interest adjustment date


The date on which a mortgage loan's term begins.

This date is important because of the way the mortgage loan term interacts with the closing date of a sale.

Normally, lenders prefer to use the 1st or 15th of the month as payment dates for mortgage loans. The term of a mortgage loan is considered to begin on the first of these days after the sale has closed.

However, the actual closing date of the sale might be any day of the month, and the mortgage loan amount is given on the date the sale closes.

To adjust for this difference, the lender calculates the interest owed for the extra days before the first payment. This cost can easily amount to several hundred dollars, and comes as a surprise to some buyers.

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